The peso (Filipino:
piso) (sign: ₱; code: PHP)
is the currency of the Philippines. It is subdivided into 100
centavos (Spanish) or sentimo (Filipino). Before
1967, the language used on the banknotes and coins was English and
so "peso" was the name used. The language was then changed to
Pilipino (the name of the Filipino language then) and so the
currency as written on the banknotes and coins is
piso.

The peso is usually denoted by the symbol "". This symbol was added to the Unicode standard in version 3.2
and is assigned U+20B1 (₱). Other ways of writing the
Philippine Peso sign are "PHP", "PhP", "P", or "P" (strike-through
uppercase P), which is still the most common method as the Unicode
Peso sign is not yet known to be supported by major and/or
cross-platform fonts[1].

History

The Philippine peso derived from the Spanish silver coin
Real de a Ocho or Spanish dollar, in wide circulation in
the Americas and South-East Asia during the 17th and 18th
centuries, through its use in the Spanish colonies and even in the
US and Canada.

Peso
fuerte

The Philippine peso was established on May 1, 1852, when the
Banco Español-Filipino de Isabel II a (now the Bank of the Philippine
Islands) introduced notes denominated in pesos fuertes
("strong pesos", written as "PF"). Until October 17, 1854, when a
royal decree confirmed Banco Español-Filipino's by-laws, the notes
were in limited circulation and were usually used for bank
transactions. The peso replaced the real at a rate of 8 reales = 1
peso. Until 1886, the peso circulated alongside Mexican coins, some
of which were still denominated in reales and escudos (worth 2
pesos).

Coin production commenced in 1861 and, in 1864, the Philippines
decimalized, dividing the peso into 100 centimos de peso.
The peso was equal to 226⁄7
grains of gold. In 1886, Philippine colonial authorities started
the gradual phase-out of all Mexican coins in circulation in the
Philippines, citing that Mexican coins were by then of lesser value
than the coins minted in Manila.

Revolutionary period

Asserting its independence after the Philippine
Declaration of Independence on June 12, 1898, the República
Filipina (Philippine Republic) under General Emilio
Aguinaldo issued its own coins and paper currency backed by the
country’s natural resources. The coins were the first to use the
name centavo for the subdivision of the peso. After
Aguinaldo's capture by American forces in Palanan,
Isabela on March 23, 1901, the revolutionary peso ceased to
exist.

American Colonial period

After the United
States took control of the Philippines, the United States Congress passed
the Philippine Coinage Act (March 3, 1903), which fixed the weight
and fineness of Philippine coins. The peso was defined as being
equal to exactly half the gold content of the U.S.
dollar. A similar state of affairs existed in both Japan and
Mexico. The 50 cents Peso continued in both Mexico and the
Philippines right up until the 1960s.

Shortly after the introduction of the 50 cent (US) Peso, a
problem occurred which was paralled in the Straits
Settlements. The price of silver rose so high that the
Philippine Peso coins, and the new Straits dollar coins became less
valuable than their actual silver content. There was a danger in
both cases that these coins would be melted down for their silver.
In both cases, in 1907, new smaller coins were introduced with
their silver values reduced to a safer level.

Second World
War

In 1942, the Japanese
occupiers introduced notes
for use in the Philippines. Emergency circulating notes
(also termed "guerrilla pesos") were also issued by banks and local
governments, using crude inks and materials, which were redeemable
in silver pesos after the end of the war. The Japanese-sponsored Second Philippine Republic
under José P.
Laurel outlawed possession of guerrilla currency and declared a
monopoly on the issuance
of money and anyone found to possess guerrilla notes could be
arrested. Because of the fiat nature of the currency, the
Philippine economy felt the effects of hyperinflation.

U.S. and Philippine forces continued printing Philippine pesos,
so that, from October 1944 to September 1945, all earlier issues
except for the emergency guerrilla notes were considered illegal
and were no longer legal tender.

Independence

Republic Act No. 265 created the Central Bank of the
Philippines (CBP, now the Bangko Sentral ng Pilipinas) on
January 3, 1949, in which was vested the power of administering the
banking & credit system of the country. Under the act, all
powers in the printing and mintage of Philippine currency was
vested in the CBP, taking away the rights of the banks such as Bank
of the Philippine Islands and the Philippine National Bank to issue
currency.

In 1967, the language used on all coins and banknotes was
changed to Pilipino. As a consequence, the
wordings of the currency changed from centavo and
peso to sentimo and piso.

In a repeat of Japanese wartime monetary policy, the government
defaulted on its promises to redeem its banknotes in silver or gold
coin while promising to maintain the two-to-one peso to dollar
parity. This decision, compounded with the deliberate overprinting
of fiat banknotes, resulted in the peso dropping in value by almost
300% against the US dollar within the first three hours of opening
day. The government effort to maintain the peg devastated the gold,
silver and dollar reserves of the country.

By 1964, the bullion value of the old silver pesos was worth
almost twelve times their face value and were being hoarded by
Filipinos rather than being surrendered to the government at face
value. In desperation, then-President Diosdado Macapagal demonetized the
old silver coins and floated the currency. The peso has been a floating
currency ever since, which means that the currency is a
physical representation of the domestic debt and whose value
directly tied to people's perception of the stability of the
current regime and its ability to repay the debt.

From the opening of the Bangko Sentral ng Pilipinas in 1949,
successive governments have continued to devalue the currency in
order to lower the accumulated domestic debt in real terms, which
in December 2005 reached ₱4.02 trillion. Many Filipinos perceive
the peso's value in relation to the US dollar and tend to blame
whatever regime is in power for the worsening exchange rate.

Current
economy

Based on the current price of gold, the Philippine peso has now
lost 99.9998% of its original 1903-1949 value. As of July 20, 2008,
the value of the 1903-1949 Philippine Commonwealth peso, as per
definition 12.9 grains of pure gold (or 0.026875 XAU), would now cost ₱1,136.09 on the
international commodity markets.

As of October 2005, the Philippine money supply (M1) totaled about 569.2
billion pesos (about US$11.5 billion). As of January 4, 2010, the
PHP is traded at 45.90 per US-Dollar.[2]

Coins

In 1861, gold coins were issued for 1, 2 and 4 pesos. These were
equal in gold content to the earlier Spanish coins of ½, 1 and 2
escudos. Silver coins were minted from 1864 in denominations of 10,
20 and 50 centimos de peso, with silver 1-peso coins issued in
1897. During the Revolutionary period, coins were issued in copper
for 1 and 2 centavos and 2 centimos de peso.

In 1903, a new coinage was introduced. It consisted of bronze ½
and 1 centavo, cupro-nickel 5 centavos and silver 10, 20 and 50
centavos and 1 peso. The silver coins were weight related to the
peso which was minted in .900 fineness and contained 374.4 grains
of silver. U.S. gold coins and ½ and 1 peso coins were legal tender
for any amount, with 10 and 20 centavos coins being legal tender up
to 20 pesos and smaller coins up to 2 pesos. The sizes and
finenesses of the silver coins were reduced in 1907, with the peso
now a 20 gram coin minted in .750 silver. Production of the 1 peso
coin ceased in 1912 and that of the 50 centavos in 1921.

The American Government deemed it more economical and convenient
to mint silver coins in the Philippines, hence, the re-opening of
the Manila Mint in 1920, which produced coins until the
Commonwealth period.

In 1937, coin designs were changed to reflect the establishment
of the Commonwealth. No coins were minted in the years 1942 and
1943 due to the Japanese occupation, but minting resumed in 1944,
including production of 50 centavos coins. Due to the large number
of coins issued between 1944 and 1947, coins were not minted again
until 1958.

Detail on a 5-piso coin

In 1958, a new, entirely base metal coinage was introduced,
consisting of bronze 1 centavo, brass 5 centavos and nickel-brass
10, 25 and 50 centavos. In 1967, the coinage was altered to reflect
the use of Filipino names for the currency units. This was the "Ang
Bagong Lipunan" series. Aluminium replaced bronze and cupro-nickel
replaced nickel-brass that year. 1-piso coins were introduced in
1972, followed by 5-piso coins in 1975. The Flora and Fauna series
was introduced in 1983 which included 2-piso coins. The sizes of
the coins were reduced in 1991, with production of 50-sentimo and
2-piso coins ceasing in 1994. The current series of coins was
introduced in 1995, with 10-piso coins added in 2000.

Coins currently circulating are:

5 sentimo

10 sentimo

25 sentimo

1 peso

5 peso

10 peso

Denominations below 1 piso are still issued but are not in wide
use. In December 2008 a Philippine
Congress resolution called for the retirement and
demonetization of all coins less than one peso. [3]

Between 1903 and 1918, silver certificates were issued, in
denominations of 2, 5, 10, 20, 50, 100 and 500 pesos. These were
replaced with Treasury Certificates, issued between 1918 and 1941
in denominations of 1, 2, 5, 10, 20, 50, 100 and 500 pesos.

In 1904, the Banco Español-Filipino introduced notes in
denominations of 5, 10, 25, 50, 100 and 200 pesos. In 1912, this
bank changed its name to the Bank of the Philippine
Islands (BPI), continuing to issue notes until 1933. The
Philippine National Bank (PNB) issued notes in 1916 in
denominations of 2, 5 and 10 pesos, with emergency notes issued in
1917 for 10, 20 and 50 centavos, 1, 5, 10 and 20 pesos. Between
1918 and 1937, the PNB issued notes in denominations of 1, 2, 5,
10, 20, 50 and 100 pesos. These notes were in circulation until
1947.

The Japanese issued two series of notes. The first was issued in
1942 in denominations of 1, 5, 10 and 50 centavos, 1, 5 and 10
pesos. The second, from 1943, was in denominations of 1, 5, 10,
100, 500 and 1000 pesos.

A 100-peso note from the English Series, which was introduced in
1951 and was replaced by the Pilipino Series in 1969.

In 1944, Treasury Certificates, featuring the word "Victory"
printed on the reverse, were issued to replace all the earlier
notes. These were in denominations of 1, 2, 5, 10, 20, 50, 100 and
500 pesos.

In 1949, the Central Bank of the Philippines took over paper
money issue. Its first notes were overprints on the Victory
Treasury Certificates. These were followed in 1951 by regular
issues in denominations of 5, 10, 20 and 50 centavos, 1, 2, 5, 10,
20, 50, 100, 200 and 500 pesos. The centavo notes (except for the
50-centavo note, which would be later known into the half-peso
note) were discontinued in 1958 when the English Series coins were
first minted.

In 1967, the CBP adopted the Filipino language on its currency,
using the name Bangko Sentral ng Pilipinas, and in 1969 introduced
the "Pilipino Series" of notes in denominations of 1, 5, 10, 20, 50
and 100 piso. The "Ang Bagong Lipunan Series" was introduced in
1973 and included 2-peso notes. A radical change occurred in 1985,
when the CBP issued the "New Design Series" with 500-piso notes
introduced in 1987, 1000-peso notes (for the first time) in 1991
and 200-piso notes in 2002.

Philippine banknotes are currently issued in the following
denominations:

Polymer
banknote

In July 8, 2009, the Bangko Sentral Ng Pilipinas (BSP) has
announced that it will soon recall its abaca-cotton made banknotes
and replace it with an all-polymer series. This are still in the
planning stage and no specific date has been cited for the printing
and replacement. [4]

Recent
issues

"Arrovo"
banknotes

In 2005, several 100-peso notes where President Gloria Macapagal-Arroyo surname
was misspelled "Arrovo" were in circulation. Days after this was
first found out, the BSP ordered an investigation. [5]

Fraud problem with the
1-piso coin

By August 2006, it became publicly known that the 1-piso coin
has the same size as the 1 United Arab Emirates dirham
coin.[6]
However, 1 peso is only worth 7 fils (0.07 dirham), leading to
vending machine fraud in the U.A.E. Similar frauds have also
occurred in the U.S., as
the 1-piso coin is roughly the same size as the Quarter and is worth only
two cents. Newer digital parking meters, however, are not affected
by the fraud.

Similarities
of the 10-piso coin over the 2 Euro coin

The 10 peso coin is also similar to the 2 Euro coin making it easy to pass for a
Euro in some establishments in the
EU.